EL AL’s president resigns as the Israeli airline is again at a crossroads

The resignation of EL AL president and chief executive Elyezer Shkedy does not surprise industry insiders.

He himself did not provide an explanation, but it is clear the Israeli airline is again at a crossroads, and that Shkedy could not see it embarking on a paved path in the future.

The mistakes began long before Shkedy was appointed four years ago. The Israeli airline is still flying only five and a half days a week – in spite of the fact that the airline was privatised.

When it was state-owned the religious parties demanded the fleet be grounded on Friday afternoons. It was expected that after going private that limitation would be lifted – but it was not. The majority shareholders supplied a very unreasonable explanation that flying on the Jewish Shabbat will make religious passengers fly with other airlines.

This is stupidity at its best, and the Israeli airline has been paying for it, big time. It will pay even more as the skies over Europe are being opened fast.

EL AL failed to trim its payroll, and an investment fund that planned to acquire a big chunk of its shares walked away, after it became clear that the management under Shkedy cannot deliver the goods in the shape of a workforce that is 900 people smaller.

EL AL yesterday notified the Tel Aviv Stock Exchange of Shkedy’s decision. It said a replacement would be selected and trained by the time he leaves office, and that Shkedy’s resignation was not based on any issues within the company that could be relevant to stockholders.

Shkedy, a former commander in the Israeli air force, has said privately that he is leaving the company simply because he feels that under the circumstances, he is unable to change things.

This feeling is shared by many in both the airline and the aviation industry in Israel. Without some bold moves, EL AL will have great difficulties in reaching positive results.

The airline has been making mistake after mistake, and the new CEO will have a big challenge to change the situation.

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